International Food and Agricultural Trade Policy Council
Policy Areas
Press Room
Publications
Events
Global Reach
About Us
Email Newsletter Signup
Bookmark and Share
About IPC
International Food and Agricultural Trade Policy Council
Photo Collage
Promoting an Open and Equitable Global Food System

IPCDiscussion Paper

The Economic Impacts of Asynchronous Authorizations and Low Level Presence: An Overview

By Nicholas Kalaitzandonakes

October 2011

Download the PDF

This paper discusses the potential economic impacts of asynchronous authorizations and low level presence (LLP) of biotech events not yet authorized in the importing country in agricultural commodities and foods traded in international markets. In this context, the paper provides an overview of key economic factors that may be taken into account when alternative LLP policies are being considered. Available empirical evidence suggests that the economic impacts of regulatory asynchronicity and LLP can be significant, highlighting the need for effective national LLP policies.

China's Agricultural Biotechnology Regulations - Export and Import Considerations

By Jikun Huang and Jun Yang

October 2011

Download the PDF

This paper indicates that trade disruptions due to China’s zero threshold approach to LLP could result in a slight increase in domestic maize price and large rise in soybean price, with knock-on effects on the livestock sector and overall social welfare, and also have repercussions in the export markets. The paper also points out that China has so far not opted to seek approval of its GM crop events in any foreign country. This could lead to trade disruptions affecting Chinese rice exports, although these exports are declining, but also growing exports of processed rice products.

Asynchronous Approvals of GM Products and the Codex Annex: What Low Level Presence Policy for Vietnam?

By Guillaume P. Gruere

October 2011

Download the PDF

This paper analyzes the economic effects of policy options under the Codex Annex on Low Level Presence (LLP) to manage the risk of trade disruption with asynchronous approval of genetically modified (GM) products, focusing on Vietnam, a significant GM feed importer in the process of introducing its biosafety regulations. An analytical model is built and helps identify the tolerance level, delays in approval and in LLP approval, and trust in the exporter’s regulatory framework as critical factors for policy implementation. Empirical applications show that Vietnam’s proposed rapid authorization of GM events approved in five developed country would cost $7million more than if applied to three or fewer countries. Furthermore, maintaining a zero tolerance level for unapproved GM events would impose significant annual welfare costs for Vietnam, from $3.6 million for maize to $57million for soymeals. Any non-zero tolerance level would reduce these costs significantly, especially a 5% tolerance level.

 

Potential Economic Impacts of Asynchronous Approvals of Biotech Crops on Latin American Countries

By Nicholas Kalaitzandonakes, James Kaufman, and Douglas Miller

October 2011

Download the PDF

All major exporters in North and Latin America have extensively adopted biotech crops, while most of the Latin American importers generally have not. With major exporters and significant importers in close proximity, much of the trade of maize, soy and soybeans and processed products occurs through a dense network of exchanges crisscrossing the continent. The paper argues that the potential for such disruption is likely to increase, with significant economic implications. As new events are brought to market at an increasing rate, the divergent regulatory capacities of individual countries imply the chance for ongoing asynchronicities in the regulatory approvals of new biotech crops across the Americas.
The paper shows that smaller importing countries, whose trade can be more easily shifted across alternative suppliers, would likely experience 2-8% price increases as a result of trade disruptions, whereas larger importers would experience price increases of 9-20%.

 

Other Documents:

IPC Chief Executive Charlotte Hebebrand's Presentation from the Conference "Coexistence 2.0: Achieving Coexistence of Biotech, Conventional & Organic Foods in the Marketplace"


Submit to Digg Bookmark on Del.ici.us RSS Home Join Us Contact Us Members Subscribe to our RSS Feed Join Us